You might find yourself in need of some money and might feel stuck as to from where can you find that money? Many people opt for a personal loan which is great and has many advantages as compared to other loans. Read on to find out advantages as well as things to keep in mind before applying for a personal loan.
Advantages of a opting for a personal loan
Before taking any step related to loans it is always advisable to do research and be informed before making any decision.
Personal loans are extremely quick to get. So in case of an emergency, you can always opt for a personal loan which you will be sure to receive within 24 hours, unlike other loans which take more time.
2. Hassle free
As compared to other loans, personal loans do not require that much documentation. This saves a lot of time and hassle one goes through to get all the paperwork in place. Due to less documentation, the processing time for the loan is also faster because of which you can get the money quicker!
Personal loans can cover a large variety of purposes such as a wedding, travel or even to buy a new house. If you find yourself in a situation where you need urgent money for either a medical emergency, a personal loan is your safest bet.
4. No security required
To obtain a personal loan, you do not require any security, your assets remain safe in case you are unable to pay the loan back in time. This is great for people who do not own any assets and need a loan urgently. The loan tenure is also much shorter than that of a car or home loan.
Things to keep in mind before opting for a personal loan
- Interest rate
Make sure you calculate the interest rate before accepting a personal loan. Often things like ‘flat rate of interest’ is offered by various banks. These are often misleading and hence you must keep a lookout and calculate the interest rate with care before finalizing with a bank.
EMI schemes sound very tempting and a lot of people opt for these schemes without realizing that there are other expenses attached to it. The high processing fee and file charges are something which people often don’t realize while they opt for these schemes. Interest-free loan sounds tempting but watch out for the other expenses which you will be paying for while opting for these EMI schemes.
3. Choosing the lender
Don’t opt for the first lender that approaches you. There are various options available to get loan help and it is advisable to go through some before opting for one. Weigh out all the pros and cons of each lender before making your decision to ensure you get the best deal for your personal loan. Loan aggregator websites are a great way to find personal loans offering low rates.
4. Other charges
Other than a processing fee which is something that you will be charged, some lenders also add other charges as well. Make sure you are aware and thoroughly understand what these other charges are for before opting for the personal loan with that lender.
5. Foreclosure conditions
Foreclosure charges are not being charged for home loans, however, for personal loans, this is not the case. There are various terms and conditions which are applied to personal loans which you should thoroughly go through and understand. We suggest opting for a personal loan which has the lowest foreclosure charges.
6. Credit Score
Every time you approach a lender for a personal loan, your credit score is being checked in order to check for the lender to check your ability to pay back the loan. We understand that it is important to explore many options and look for one with the lowest rate, however, if you approach a large number of lenders, your credit score can reduce drastically as you might appear as an individual hungry for credit. Hence as suggested above, comparing your option using loan aggregator website is a smarter option and will help keep your credit score intact.
Loans are a serious matter and before taking any loan you must keep in mind your current income and already existing expenses. Failure to pay back a loan will get you into legal trouble which is something you must avoid in all cases.